Goodboyd's chief economist has predicted that Ireland's rate of economic growth will rise from 3% last year to 3.6% this year and 3.7% in 2018, despite the external challenges of Brexit and the incoming Trump administration in the US.
With economists now wary of using GDP and GNP to measure Ireland's growth, due to high profile instances of multinational activity greatly distorting the picture, O'Leary looked at core domestic demand to reach his conclusion.
This measures consumption, investment and government spending.
O'Leary talked to Breakfast Business about what was driving this growth. He said:
"The consumer looks in pretty good shape it has to be said. The latest numbers in terms of labour market show that employment is growing by 3% on an annual basis.
"The unemployment rate continues to fall obviously. And I think a feature of 2017 will be pretty widespread growth in wages, and all those are contributing to a pretty healthy situation for the Irish consumer."
Irish consumers themselves don't seem to think so, however, according to the latest report from KBC.
The KBC Bank Ireland consumer sentiment index slipped to 96.2 in December from 97.8 in November. This modest monthly decline was enough to push sentiment to a 22-month low, with the majority of Irish consumers believe the economic recovery was over promised and under delivered in 2016. Some 75% of respondents stated that the recovery had delivered no material financial benefit for them.
The Trump factor
O'Leary also highlighted the construction sector as a significant player in pushing the economy forward.
"The second aspect of it is what is happening in construction and housing," he said. "So unlike the mid-2000s where construction and housing was driving growth from a very high level. It's driving growth from a very low level at this point in time and we've got a couple of years left to go in that for housing to get back up to what we need it to be, which we think is about 30,000 [houses built annually]."
While he noted that the industry's current performance is "still a long, long way away" from coping with demand, he noted that the second half of 2016 was strong and that 18,500 units are expected to be completed in 2017, up from the 16,000 previously forecast by Goodbody. He attributed this to higher levels of available credit for developers and funding from international capital.
Goodbody looked at 10 major risks to the economy, including Brexit, but US President-elect Donald Trump's protectionist tax plans was top of the heap for O'Leary.
"It's probably going to be one of the key policies that are going to be implemented," he said. "It's not just a tax rate."
O'Leary believes the billionaire's efforts to keep business in America will not affect businesses currently based in Ireland but could have a "significant detrimental impact on FDI flows". To account for this, he believes we need to diversify when it comes to investment.
